European Union (EU)

The EU and its Member States have once again been confirmed as the largest provider of Aid for Trade in the world, despite the current economic crisis, according to a new monitoring report presented by the European Commission today. In fact, the EU accounted for around a third of total worldwide Aid for Trade in 2010; maintaining the all-time high registered the year before and totalling some €10.7 billion committed.

On Trade Related Assistance, the EU and its Member States had already met their €2 billion target, committed in the 2007's EU Aid for Trade Strategy, both in 2008 and in 2009. Aid for Trade helps countries to develop trade strategies, build trade-related infrastructure and improve their productive capacity in order to encourage growth and reduce poverty. Activities include helping countries to build their capacity to trade, through training and technical cooperation such as supporting national trade priorities, adjusting legislation on trade and providing technical assistance for studies on trade-related subjects. The report shows that total Trade Related Assistance reached €2.6 billion in 2010 and the EU and its Member States remain the biggest providers; making up 60% of global commitments. Sub-Saharan Africa continues to be the main beneficiary of EU Aid for Trade.

The 2012 report – part of a wider Annual EU Accountability report on Financing for Development - provides a key opportunity to see how the EU is helping people in the developing world to trade and integrate into the world economy.

Earlier this year, the Commission adopted a range of proposals to make trade and development instruments work hand-in-hand to help reduce poverty across the world. The Commission proposed a number of ways to improve the effectiveness of EU trade and development policy, including reforming the EU's preferential trade schemes to focus more on the poorest countries and stepping up negotiations on free trade agreements with developing country partners; helping to tackle the real barriers to trade.

BACKGROUND

In 2007, the EU and its Member States adopted a joint Aid for Trade (AfT) Strategy - aiming at supporting developing countries, particularly Least Developed Countries (LDCs), to better integrate into the world trading system and to use trade more effectively in order to eradicate poverty. The strategy focuses both on increasing the volume of AfT and on enhancing its results and effectiveness.

Responses to an AfT questionnaire from EU Delegations and Member States' field offices on the ground were also included in the report and show constant improvement in terms of the dialogue between donors and beneficiaries, and joint operations, as well as the inclusion of regional integration priorities into countries' national development plans or trade strategies.

A good example of the EU's Aid for Trade at work is a project to increase coffee production in a factory in Rwanda. Around 60,000 farmers there benefited from the project, which supports the country's tea and coffee industry. The EU provided new machines, built roads to help people easily access the estates and trained the farmers. This effectively helped re-launch coffee production in Rwanda, and now coffee and tea have a 38% share in total export value; providing jobs for many of the country's poor as a result.